The post-closing trial balances of two proprietorships on January 1, 2019, are presented below.
All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships. Further, it is agreed tat Sorensen will invest an additional $5,000 in cash, and Lucas will invest an additional $19,000 in cash.
- Prepare separate journal entries to record the transfer of each proprietorship's assets and liabilities to the partnership.
- Journalize the additional cash investment by each partner.
- Prepare a classified balance sheet for the partnership on January 1, 2019.
At April 30, partners capital balances in PDL Company are G. Donley $52,000, C. Lamar $48,000, and J. Pinkston $18,000. The income sharing ratios are 5:4:1 respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner.
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On December 31, the capital balances and income ratios in TEP Companyare as follows.
|Partner||Capital Balance||Income Ratio|
- Journalize the withdrawal of Posada under each of the following assumptions.
- Each of the continuing partners agrees to pay $18,000 in cash from personal funds to purchase Posada"s ownership equity. Each receives 50% of Posada"s equity.
- Emig agrees to purchase Posada"s ownership interest for $25,000 cash.
- Posada is paid $34,000 from partnership assets, which includes a bonus to the retiring partner.
- Posada is paid $22,000 from partnership assets, and bonuses to the remaining partners are recognized.
- If Emig"s capital balance after Posada"s withdrawal is $43,600, what were (1) the total bonus to the remaining partners and (2) the cash paid by the partnership to Posada?
K. decker, S. Rosen, and E. toso are forming a partnership. Decker is transferring $50,000 of personal cash to the partnership. Rosen owns land worth $15,000 and a small building worth $80,000, which she transfers to the partnership. Toso transfers to the partnership cash of $9,000, accounts receivable of $32,000, and equipment worth $39,000. The partnership expects to collect $29,000 of the accounts receivable.
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Coburn (beginning capital, $60,000) and Webb (beginning capital $90,000) are partners. During 2019, the partnership earned net income of $80,000, and Coburn made drawings of $18,000 while Webb made drawings of $24,000.
- Assume the partnership income sharing agreement calls for income to be divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net income.
- Assume the partnership income-sharing agreement calls for income to be divided with a salary of $30000 to Coburn and $25,000 to Webb, with the remainder divided 45% to Coburn and 55% to Webb.. Prepare the journal entry to record the allocation of net income.
- Assume the partnership income-sharing agreement calls for income to be divided with a salary of $40000 to Coburn and $35,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record the allocation of net income.
- Compute the partners' ending capital balances under the assumption in part (c)